Buybacks of the sort Stonecipher had instigated were once considered market manipulation. They represent a technique in which a company uses its revenue to acquire its own shares on the open market, then cancels them. With fewer shares outstanding, the ones left are more valuable. Hold a single share in a company that issued one hundred shares and you own a 1 percent stake. If the company buys back half of the existing shares, you now own 2 percent, artificially increasing the value of your share and increasing your dividends, without any additional expenditure on your part.
